It was the President’s first official interaction with civil society leaders after the speech in which he questioned the conduct of the Police Financial Crimes Investigations Division (FCID), the Criminal Investigations Department (CID) and the Bribery Commission.

His comments strained relations between the government and civil society representatives who supported the common opposition’s election campaign in January, last year.

The President’s meeting, on Tuesday was aimed at repairing ties between the two groups. The meeting was cordial and both parties were prepared to lay bare their issues and iron out differences.

One of the key requests made by the civil society groups was for unity between the two main coalition partners of the government: They urged the President to work closely with the Prime Minister to introduce the political reforms promised during the Presidential election campaign.

“Political reforms were the most important element of the common opposition’s election campaign, last year. As the civil society of the country, we urged the President to work hand in hand with the Prime Minister to fast track the process,” a member who attended the meeting told the Sunday Observer.

The civil society leaders had also told the President they would have a separate discussion with the Prime Minister on the same matter.

Another important topic taken up during the discussions was the delay in certain of the anti-corruption and criminal investigations.

Some of the civil society leaders drew the President’s attention to the allegation that the top-brass members of the Army, especially the ones heading the military intelligence unit, were not cooperating with the investigations carried out by the Police.

The leaders also assured the President they still had faith in the President’s efforts towards good governance and transparency, and they welcomed certain constructive measures by the National Unity government including the 19th Amendment to the Constitution and the Right to Information Act.

Both parties also agreed to have continuous dialogue on measures towards good governance and the future course of action of the government.

“The meeting was very fruitful. Over the past few months, the civil society group and the President could not maintain continuous dialogue and it has led to certain misunderstandings. The meeting laid a strong platform for a continuous dialogue - a very positive development, as far as civil society is concerned,” the member said.

A day after the President’s meeting with civil society representatives, the government made an important move and appointed a new head to the military intelligence.

Brigadier Wijendra Gunathilake, an officer with vast experience in and outside of the battlefield was appointed the new Director of the Military Intelligence Unit.

He replaced Brigadier Suresh Salley who came under severe criticism from civil society groups for attempting to create a rift within the government: They alleged the former head of the military intelligence unit was a loyalist of former Defence Secretary Gotabhaya Rajapaksa.

Addressing a press conference in Colombo two weeks ago, Prof. Sarath Wijesuriya said Army Intelligence Chief Brigadier Tuan Suresh Sallay had ‘planted a lie’ that the entire Armed Forces were against the President.

“If the President wants to end this criminal activity of the Directorate of Military Intelligence (DMI), this person (Brig. Sallay) must be removed,” Wijesuriya stressed, at the press conference.

In this context, many viewed Brigadier Gunathilake’s appointment as a positive development, especially in the wake of these allegations by the civil society groups.

Political analysts have previously opined that the government has to resort to strong measures to correct system flaws - even within the intelligence machinery - as this is essential to justice and ensuring rule of law.

New Bribery Chief

It has been said there is the need for a legal framework to govern intelligence bodies that will look into national security interests, preventing them from being employed as hit squads of political powers.

These reforms are direly needed in the country’s defence apparatus - especially in the wake of allegations of their involvement in the disappearance of journalist Prageeth Eknaligoda and the murder of former Sunday Leader Editor Lasantha Wickrematunge.

It remains the major challenge for the new Director of the Military Intelligence Unit, who will need to work with many parties to restore civil society’s faith in the military intelligence machinery.

Aside from the appointment of the new Director to the Military Intelligence Unit, the government is likely to make another important move by appointing a new Director General to head the Bribery Commission.

Sarath Jayamanne, an Additional Solicitor General attached to the Attorney General’s Department is likely to be handpicked the new Director General of the Bribery Commission.

The position became vacant with the resignation of former Director General Dilrukshi Wickremasinghe, who now works at the Attorney General’s Department as an Additional Solicitor General.

Immediately after Wickremasinghe’s resignation, Deputy Director General of the Bribery Commission Sunethra Jayasinghe was appointed the Acting Director General.

Sources close to Jayamanne said he was willing to accept the challenging position. “He is expected to go overseas for a brief period. Upon his return, Jayamanne will assume duties as the new Bribery Chief,” they added.

Jayamanne, a President’s Counsel, is the sixth in seniority at the Attorney General’s Department. He has very high credentials as a criminal lawyer and has proved to be a thorough prosecutor.

He also appeared for the Criminal Investigation Department (CID) in the Ekneligoda abduction case, one of the most controversial cases heard in the recent times.

JO Party

“Jayamanne is one of the most suitable candidates for this hot seat. He is an officer with an unblemished track record. He will not be as outspoken as Dilrukshi Wickremasinghe but it is hard to believe that he will bow down to political powers and external influences,” a government spokesman told the Sunday Observer.

While the government was busy with new appointments this week, former External Affairs Minister and Joint Opposition member Prof. G.L. Peiris sought the Elections Department’s app roval to change the name of the political party ‘Our Sri Lanka Freedom Party’ (Apey Sri Lanka Nidhahas Pakshaya).

Peiris, who joined Parliamentary politics in 1994 with the People’s Alliance led by Chandrika Bandaranaike Kumaratunga, put his name down as the Chairman of the now new ‘Sri Lanka People’s Front’ (Podu Jana Peramuna).

‘Our Sri Lanka Freedom Party’ was formed by Wimal Geeganage, who went on to contest a Presidential election under the same party to no great consequence some years ago. The party’s official symbol was the ‘flower bud’ and remains the same.

It is not difficult to understand the objective behind appointing G.L. Peiris the Chairman of the party: The former Minister does not hold any important position or responsibility within the SLFP - he only functions as a member of the Joint Opposition, with no affiliation to a single political party.

Peiris will save former President Rajapaksa from the allegation that he is attempting to divide the SLFP - this way Rajapaksa can have his fingers in both the SLFP and ‘Sri Lanka People’s Front’ pies.

At some decisive point, Peiris is expected to hand over the reins to former President Rajapaksa - or to one of his brothers - without any hesitation or compunction. Until such time he will function as a proxy, subserviently executing the former President’s will.

Rajapaksa himself is not yet in any position to officially launch a new party, as the government is yet to decide the date of the Local Government election. Launching the new party too early will plunge the Rajapaksa group into a disadvantageous position - the group will just have to work hard to maintain the momentum and sustain energy until the official launch of their new political party ahead of the next Local Government election.

It is also important to understand that a sizable proportion of Rajapaksa supporters still stand with the former President, believing the latter will somehow regain control of the SLFP: At the least, they believe that the former President will at some point enter into a peace pact with the incumbent leader of the party.

Peiris’ new party has disappointed this group of supporters as it drives them away from the SLFP: It widens the gap between the faction led by the incumbent President and the coterie supporting the former President. It leaves them with the unenviable task of making a hard choice. It can be assumed that the majority of them will choose to remain with the SLFP as it is the easier and safer option at this juncture.

Tender issues

The coal supply issue, which remained dormant for some few weeks, has resurfaced with the government’s plan to go ahead with a term-contract to supply coal to the Lakvijaya Coal Power Plant in Norochcholai.

This will allow the Swiss Singapore Overseas Enterprises (Pvt) Ltd., to supply 50 percent of the required coal under their existing contract - the remaining 50% will go to contracts on a spot-tender basis.

“This is not an entirely new practice,” Dr. B.M.S. Batagoda, Secretary of the Ministry of Power and Energy explained. “That is how we purchased coal in 2015, as well. We needed 2.2 MTs of coal and we purchased 1.1 MT on a term-contract and the rest on a spot-tender basis. As result of this process, after 6 years, we achieved highly successful results in coal purchasing, last year.”

“This year too, the government decided to adopt the same policy. There were some parties who raised concerns that it is not a healthy policy - mainly due to fluctuation of prices.

But, there is a flip side to this argument: By purchasing 50% of our requirement on a term-contract and the rest on spot-tenders, we can keep coal suppliers on their toes. If the long-term supplier fails to meet our demands, we have the option of purchasing coal on a spot-tender basis. It strengthens the position of the government,” he told the Sunday Observer.

However, the rumour mill has once again begun crying foul, with the question of if a ‘term-contract’ is necessary as the rates on spot-tenders are now lower than the rates for term-contracts.

When it comes to tenders for coal, the best tradition followed by this country is cancelling: In the past six years alone, six tenders were cancelled and contracts extended to the sitting contractor without a tender - a rather suspect method, vehemently condemned by the CEB and the Ministry of Power & Energy.

Analysts have said a lack of understanding surrounds ‘term-contracts’ and buying on-the-spot: When buying fuel commodities in the world market, there needs be a hedge against price fluctuation, they said.

Some years ago errors were made with hedging on petroleum contracts, and similar errors seem to occur with the purchase of coal.

A Bloomberg report in October 17 said that price of coal has surged this year after a surprise change in Chinese policy that lowered domestic production - as a result of which steel mills and power plants in China have increased coal imports since April, boosting prices.

The report further states that coal is the hottest commodity today and their trading view is that it will remain well supported with prices rising over the next six months.

Price fluctuations in this market are inevitable and that is why purchases are typically split into two broad categories i.e. term-contracts and spot-contracts, a recent International Energy Agency (IEA) report said.

Advantages

Regardless of the sophistication of the contract, term offers many advantages that spot-tenders do not, especially for power plants operating under base load - according to the report.

Outlining the fact that there are numerous benefits to the longer term-contracts, it says that the primary reason for adopting such agreements is possibly the benefit of accruing a volume of coal at the right quality and better predictability in price (as well as it being geared to a fixed or variable formula).

The report said that volatility is caused by supply and demand i.e. though market participants attempting to predict future market effects that there are no guarantees to as they are dealing with the unknown: Colder winters, warmers summers, changes in environmental laws, alternative fossil markets (natural gas/oil prices), technological innovations, natural disasters, labour issues and equipment failures are all factors that impact price volatility.

Under certain circumstances, term-contracts serve as a useful and often indispensable instrument for coal procurement: Flexibility can be built in terms of volume, price and quality, while providing greater confidence in the long-term operation of a power plant, the report said.

The background note of the IEA Clean Coal Centre report - a collaborative project of member countries - said that term-contracts which go above ten years are no longer looked at favourably, as opposed to shorter spot-contracts of one to two years.

In Sri Lanka, after purchasing from a single supplier for a period of about five years, the Power & Energy Ministry announced they were going to supply demand with a mix of 50 percent long-term and 50 percent short-term contracts.

They said this would create a stable environment to supply coal to the Lakvijaya plant, which produces 50 percent of the country’s energy requirement.

When the plant shut down recently due to ‘tripping’, a great fear enveloped the country that there would be load shedding, resulting in huge power cuts across the country.

The government was even thinking of expensive alternatives such as air lifting thermal power plants, something the CEB could ill afford.

It is important to understand that the purchasing of commodities in international market, in this modern world, requires an amount of sophisticated planning - the best way forward would be to hedge our bets.